Mercer Times

Attorney General Matthew J. Platkin of New Jersey and Attorney General Brian Schwalb of the District of Columbia have taken a leading role in defending the Federal Trade Commission's (FTC) rule to eliminate noncompete clauses from employment contracts across the United States. The multistate brief, led by Platkin and Schwalb, supports federal policies aimed at protecting workers.

In April 2024, the FTC introduced a rule that prevents employers from restricting employees from joining or starting competing businesses within a certain period after leaving their job. The FTC argues that such noncompete agreements can lower wages, create legal barriers for career advancement, and hinder economic growth by trapping workers in their current positions.

"Noncompete agreements prevent millions of American employees from taking new jobs or creating businesses," said Attorney General Platkin. "We are grateful that the FTC rightly applied federal law to prevent these anticompetitive and antiworker measures."

The noncompete ban has faced several legal challenges. One such challenge is Properties of the Villages, Inc., vs. the Federal Trade Commission. In August 2024, a federal judge issued a limited preliminary injunction against the FTC regarding this rule. In response, a coalition of states filed an amicus brief in support of reversing this injunction in the U.S. Court of Appeals for the Eleventh Circuit.

Previously, the legality of noncompete agreements varied by state, creating confusion for workers and distorting labor markets across different regions. The healthcare industry stands to benefit significantly from this rule due to its concentration with fewer employers using noncompetes extensively.

Public comments submitted by physicians and healthcare practitioners highlighted difficulties faced under existing noncompetes, such as needing to relocate significant distances to comply with geographic restrictions.

Joining Attorneys General Platkin and Schwalb in this effort are their counterparts from California, Colorado, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Pennsylvania, Vermont, and Washington.

New Jersey's representation includes Deputy Attorney Generals Marcus Mitchell and Bryce K. Hurst among others under supervision within various sections of its Division of Law’s Affirmative Civil Enforcement Practice Group.

The Office of the Attorney General continues to investigate violations under New Jersey Antitrust Act to promote fair competition within the state.